UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report on
FORM 10-Q
(Mark one)
( X ) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended December 31, 1994
-----------------
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to _______
Commission File Number 1-7463
JACOBS ENGINEERING GROUP INC.
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(Exact name of Registrant as specified in its charter)
Delaware 95-4081636
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(State of incorporation) (I.R.S. employer identification number)
251 South Lake Avenue, Pasadena, California 91101
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(Address of principal executive offices) (Zip code)
(818) 449 - 2171
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(Registrant's telephone number, including area code)
Indicate by check-mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days:
(X) YES - ( ) NO
Number of shares of common stock outstanding at February 7, 1995: 25,080,547
Page 1
JACOBS ENGINEERING GROUP INC.
INDEX TO FORM 10-Q
Page No.
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Part I - Financial Information
Item 1. Financial Statements:
Consolidated Condensed Balance
Sheets as of December 31, 1994
and September 30, 1994 3
Consolidated Condensed Statements
of Income for the Three Months
Ended December 31, 1994
and 1993 4
Consolidated Condensed Statements of
Cash Flows for the Three Months
Ended December 31, 1994
and 1993 5
Notes to Consolidated Condensed
Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8 - 9
Part II - Other Information 10
Signatures 10
Page 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
December 31, September 30,
1994 1994
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ASSETS
Current Assets:
Cash and cash equivalents $ 22,126,000 $ 45,611,600
Marketable securities 2,915,700 2,896,900
Receivables 275,167,300 288,095,200
Deferred income taxes 27,224,100 27,546,100
Prepaid expenses and other 2,878,100 3,334,800
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Total current assets 330,311,200 367,484,600
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Property, Equipment and
Improvements, Net 58,793,800 60,002,700
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Other Noncurrent Assets:
Goodwill, net 38,303,500 38,641,200
Other 41,351,500 38,235,700
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Total other noncurrent assets 79,655,000 76,876,900
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$468,760,000 $504,364,200
================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 10,415,400 $ 9,238,100
Accounts payable 65,297,800 93,117,100
Accrued liabilities 96,237,300 102,205,600
Customers' advances in excess
of related revenues 44,387,800 47,369,300
Income taxes payable 12,719,700 8,469,600
Deferred income taxes 1,027,700 1,027,700
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Total current liabilities 230,085,700 261,427,400
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Long-term Debt 15,000,000 25,000,000
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Deferred Gains on Real Estate
Transactions 2,460,000 2,665,000
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Other Deferred Liabilities 14,542,400 14,838,500
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Commitments and Contingencies
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Stockholders' Equity:
Capital stock:
Preferred stock, $1 par value,
authorized - 1,000,000 shares,
issued and outstanding - none - -
Common stock, $1 par value,
authorized - 60,000,000 shares,
issued and outstanding -
25,080,547 and 25,094,874 shares,
respectively 25,080,500 25,094,900
Additional paid-in capital 36,547,800 37,251,400
Retained earnings 143,492,400 136,205,600
Other 1,551,200 1,881,400
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Total stockholders' equity 206,671,900 200,433,300
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$468,760,000 $504,364,200
================================================================================
See the accompanying notes.
Page 3
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED DECEMBER 31, 1994 AND 1993
(UNAUDITED)
1994 1993
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Revenues $412,355,700 $260,609,900
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Costs and Expenses:
Direct costs of contracts 368,587,600 226,424,800
Selling, general and
administrative expenses 31,740,400 22,507,700
Interest expense (income), net 45,200 (190,700)
Other income, net (103,400) (470,900)
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400,269,800 248,270,900
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Income before taxes 12,085,900 12,339,000
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Provision for Income Taxes 4,785,900 5,059,000
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Net Income $ 7,300,000 $ 7,280,000
================================================================================
Net Income Per Share $ .29 $ .29
================================================================================
See the accompanying notes.
Page 4
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1994 AND 1993
(UNAUDITED)
1994 1993
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Cash Flows from Operating Activities:
Net income $ 7,300,000 $ 7,280,000
Adjustments to reconcile net income
to net cash flows from operations:
Depreciation and amortization 3,816,000 2,096,700
Amortization of deferred gains (205,000) (241,600)
Gains on sales of investments - (682,200)
Changes in assets and liabilities:
Receivables 11,995,800 (10,899,000)
Prepaid expenses and other 454,900 (402,700)
Accounts payable (27,810,600) (16,633,400)
Accrued liabilities (5,941,500) (7,208,800)
Customers' advances (2,959,400) 3,225,300
Income taxes payable 4,255,500 2,679,800
Deferred income taxes 322,000 (771,600)
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Net cash used (8,772,300) (21,557,500)
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Cash Flows from Investing Activities:
Additions to property and
equipment, net of disposals (2,255,000) (12,379,600)
Net increase in other assets (3,069,200) (2,559,700)
Net increase in investments (634,000) (67,800)
Proceeds from sales of marketable
securities - 17,598,100
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Net cash provided (used) (5,958,200) 2,591,000
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Cash Flows from Financing Activities:
Exercise of stock options 162,000 460,200
Bank borrowings (repayments), net (8,735,100) 10,805,300
Other, net (160,100) -
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Net cash provided (used) (8,733,200) 11,265,500
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Effect of Exchange Rate Changes (21,900) (94,700)
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Decrease in Cash and Cash Equivalents (23,485,600) (7,795,700)
Cash and Cash Equivalents at
Beginning of Period 45,611,600 20,515,000
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Cash and Cash Equivalents at
End of Period $ 22,126,000 $ 12,719,300
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See the accompanying notes.
Page 5
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. The accompanying consolidated condensed financial statements and financial
information included herein have been prepared by the Company, without
audit, pursuant to the interim period reporting requirements of Form 10-Q.
Consequently, certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. Readers of this
report should refer to the consolidated financial statements and the notes
thereto incorporated into the Company's latest Annual Report on Form 10-K.
In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements present fairly its consolidated financial
position at December 31, 1994 and September 30, 1994, its consolidated
results of operations for the three months ended December 31, 1994 and
1993, and its consolidated cash flows for the three months ended December
31, 1994 and 1993.
The Company's interim results of operations are not necessarily indicative
of the results to be expected for the full year.
2. Included in receivables at December 31, 1994 and September 30, 1994 were
unbilled amounts totalling $60,950,000 and $70,252,200, respectively.
3. Property, equipment and improvements are stated at cost and consisted of
the following at December 31, 1994 and September 30, 1994:
December 31, September 30,
1994 1994
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Land $ 6,963,600 $ 6,963,600
Buildings 24,576,600 24,549,500
Equipment 76,027,300 74,687,100
Leasehold improvements 12,357,900 11,948,800
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119,925,400 118,149,000
Less - accumulated depreciation
and amortization 61,131,600 58,146,300
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$ 58,793,800 $ 60,002,700
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Page 6
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1994
4. Other noncurrent assets consisted of the following at December 31, 1994 and
September 30, 1994:
December 31, September 30,
1994 1994
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Prepaid pension costs $11,295,800 $11,378,800
Cash surrender value of life
insurance policies 14,409,700 11,676,700
Investments 8,470,800 8,202,100
Miscellaneous 7,175,200 6,978,100
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$41,351,500 $38,235,700
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6. During the three months ended December 31, 1994 and 1993, the Company made
cash payments of approximately $300,000 and $2,704,800, respectively, for
income taxes, and approximately $544,000 and $152,000, respectively, for
interest.
7. Net income per share for the three months ended December 31, 1994 and 1993
has been computed based upon the weighted average number of shares of
common stock and, if dilutive, common stock equivalents outstanding as
follows:
1994 1993
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Average number of
shares of common
stock outstanding 25,078,600 24,773,900
Average number of
shares of common
stock equivalents
outstanding 145,000 325,800
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25,223,600 25,099,700
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Page 7
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
DECEMBER 31, 1994
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with management's
discussion and analysis of financial condition and results of operations
incorporated by reference into the Company's latest Annual Report on Form 10-K.
Results of Operations
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Revenues for the three months ended December 31, 1994 (the "first quarter of
fiscal 1995") were $412.4 million; this was $151.7 million more than revenues
for the three months ended December 31, 1993 (the "first quarter of fiscal
1994"). Of the total increase, approximately $137.6 million was attributable to
the operations of Jacobs - Sirrine Engineers (the operating division formerly
known as CRS Sirrine Engineers) and CRSS Constructors (two businesses the
Company acquired during the fourth fiscal quarter last year). Including the
acquisitions, revenues in the first quarter of fiscal 1995 from engineering
services increased 44.1% as compared to the first quarter of fiscal 1994. The
Company billed 2.8 million professional services hours to projects during the
first quarter of fiscal 1995; this was 0.7 million more hours than the number
billed during the corresponding period last year. Revenues from construction
and maintenance services in the first quarter of fiscal 1995 were 66.0% higher
as compared to the first quarter of fiscal 1994.
As a percent of revenues, direct costs of contracts were 89.4% for the first
quarter of 1995, as compared to 86.9% for the first quarter of 1994. The
percentage relationship between direct costs of contracts and revenues will
fluctuate between reporting periods depending on a variety of factors including
the mix of business during the reporting periods being compared, as well as the
level of margins earned from the various services provided in the various
industry groups and markets serviced by the Company. Historically, engineering
services provide for higher margins than either construction or maintenance
services. In general, the increase in this percentage relationship in the first
quarter of fiscal 1995 as compared to the corresponding period last year was due
to the higher portion of construction and maintenance revenues in the current
quarter as compared to last year.
Selling, general and administrative ("S,G & A") expenses were $31.7 million for
the first quarter of fiscal 1995; this was $9.2 million more than the amount for
the corresponding period last year. Most of the increase is attributable to S,G
& A expenses of Jacobs - Sirrine Engineers and CRSS Constructors. Also
contributing to the increase was higher levels of S,G & A spending in support of
an overall higher level of business volume in the current fiscal period as
compared to the corresponding period last year.
The Company's operating profit (defined as income before taxes, other income or
expense, net and interest income or expense, net) for the first quarter of 1995
was $12.0 million; this was $0.4 million more than the operating profit for the
first quarter of 1994. The increase in operating profit was due to the higher
level of business activity in the current fiscal period as compared to the
corresponding period last year.
Page 8
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
DECEMBER 31, 1994
Other income, net was $0.1 million for the first quarter of fiscal 1995; this
was $0.4 million less than the amount for the corresponding period last year.
Last year's amount included gains from sales of marketable securities.
Backlog Information
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The following table summarizes the Company's backlog information at the dates
indicated (in millions):
December 31, December 31,
1994 1993
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Engineering services $ 813.3 $ 736.0
Total 2,525.0 1,893.0
Liquidity and Capital Resources
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The Company's cash and cash equivalents decreased $23.5 million during the three
months ended December 31, 1994. This compares to a net decrease of $7.8 million
during the corresponding period last year. The current year decrease in cash
and cash equivalents was due to cash used in operations ($8.8 million),
investing activities ($6.0 million) and financing activities ($8.7 million).
Operations used $8.8 million of cash and cash equivalents during the three
months ended December 31, 1994. This compares to a net use of cash of $21.6
million for the three months ended December 31, 1993. Most of the variance was
due to the timing of cash receipts and payments on receivables and liabilities,
respectively, in the current fiscal period as compared to the corresponding
period last year. Also contributing to the variance was higher depreciation and
amortization expense in the current fiscal period (which is a non-cash charge
against income), as well as to reduced gains from sales of marketable
securities.
The Company's investing activities used $6.0 million of cash and cash
equivalents during the three months ended December 31, 1994. This compares to a
net contribution of $2.6 million for the three months ended December 31, 1993.
Cash generated from sales of marketable securities was $17.6 million higher last
year than this year, but additions to property and equipment were $10.1 million
higher last year than this year.
Cash flows from financing activities used $8.7 million in cash and cash
equivalents during the three months ended December 31, 1994. This compares to
net contributions of $11.3 million for the three months ended December 31, 1993.
The variance was due primarily to higher net bank borrowings last year as
compared to the current fiscal period, combined with slightly higher stock
option activity last year versus this year.
The Company believes it has adequate capital resources to fund its operations
for the remainder of 1995 and beyond. At December 31, 1994, the Company's
short- and long-term committed credit facilities totaled $88.8 million through
banks in the U.S. and the U.K., against which $25.3 million was outstanding at
that date.
Page 9
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
27. Financial Data Schedule - being filed herewith.
(b) Reports on Form 8-K:
On October 6, 1994, the Company filed Form 8-K/A with the
Securities and Exchange Commission. The purpose of the
Form 8-K/A was to file the audited financial statements of the
engineering and construction management services businesses
acquired from CRSS Inc. on July 31, 1994, as well as certain pro
forma financial information.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JACOBS ENGINEERING GROUP INC.
s/n John W. Prosser, Jr.
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John W. Prosser, Jr.
Senior Vice President, Finance
and Administration and Treasurer
Date: February 7, 1995
Page 10